As a nation, we are increasingly becoming a cashless society and our schools, colleges and universities are no different. To get a better idea of the cashless challenges faced by HE institutions and how these can be overcome, we speak to our corporate account manager Matt Sewell, who handles accounts for a number of prestigious university Student Unions, including University of London, De Montfort University and the University of Northampton.
What are the benefits of cashless systems for universities?
Most students live on a tight budget, and may not always have cash on them. Using cash to pay for goods and services can drain a bank account: paying for a £4.99 meal, for example, can requiring withdrawing £10 from an ATM, i.e. more cash than immediately required and is often, therefore, more easily frittered away. Since cash also doesn’t provide a neat record of transactions/balances, it can be all too easy to unknowingly drift into your overdraft and not know where your money has gone.
People aged 18-34 are four times more likely to carry a phone than cash, highlighting the growing importance of the mobile phone as a replacement for all or part of the wallet. Furthermore, 2015 research from Visa indicates that 75% of 16-24 year olds in the UK “would feel comfortable using information such as fingerprint scans, facial recognition or retina scanning in place of traditional passcodes”.
Cash is a burden for businesses. Cash is more expensive to insure, count, store & generally manage. It also is much more open to fraud and human error.
Cash is also slow - at busy times in both retail and hospitality environments such as Student Union bars and clubs. Slow processes and speed of service lose sales and damage the brand. Human error also massively reduces profits.
A single cash transaction requires getting the money out of a wallet/pocket, counting it, handing it over, waiting while the sum offered is checked, receiving any change, checking the change, and putting it away. Compare this to an integrated contactless payment, which takes 1-2 seconds.
How has cashless tech developed in recent years in-line with student demand?
Not only do students tend to be more technology-savvy, but cash can be more problematic for them. To begin with, young people tend not to know how much cash they have. Also, their purchasing patterns are often concentrated in one area, on and around campus, and can reflect odd hours; therefore, accessing an ATM (and one which is loaded and functioning) may not always be easy, free or safe.
- A student’s financial and technological experience affects their overall experience.
- Students expect institutions to invest in their experience beyond just their tuition
- A better student experience enables institutions to attract and retain more students
- Support with financial management can be of great value to international students.
Can cashless systems do more than pay for catering? Which other departments can benefit from this technology?
'Cashless’, although a commonly used term, is actually a perhaps a slightly misused meaning in this respect. It’s unlikely that campuses or universities will go entirely cashless in the foreseeable future, but for this purpose the term ‘cashless’ really refers to ‘a lot less cash’.
Under a fully integrated cashless system, a single payment system provides access to goods and services right across the entire campus (and even beyond), incorporating products and services such as the learning environment, library, common amenities, catering, security, shops (on campus and online), and much more.
How good are universities at utilising the latest technology in payment systems?
Despite the availability of technology and systems, some businesses & universities haven’t embraced cashless operations as fast as you might expect. Adoption may be hindered by concerns about investment, supplier selection, and system implementation/management. It may simply be a question of cold feet. Sometimes, there’s a sense that cash is cheaper to transact. Cash payments cost an average of 2p to process, versus merchant charges for debit-card and credit card payments, although these can actually be much cheaper than expected. Businesses often forget the significant add-on costs involved in receiving, counting, insuring, storing, reconciling and transporting cash, let alone human error and the fact cash is much more open to fraud and theft.
Certain verticles lend themselves particularly well to going cashless. Further and higher education is ideally suited for the following reasons:
- Students and staff represent a distinct set of customers, regularly gathering together in one location.
- Students are generally already technology-savvy and early adopters; they’re over 40% more likely to have a smartphone than the overall UK population, and phones are ideal for identity verification and transaction processing in a cashless environment. This is especially true with the availability and rise in popularity and of Apple Pay.
- The natural sense of community, coupled with brand loyalty to the institution, can help to drive uptake of the system.
- Students are more likely to engage with discounts, promotions and loyalty rewards, which can help achieve much faster buy-in to the system.
How do you think cashless tech (in a HE setting) will develop further?
There is growing pressure for universities and colleges to save money. At the same time, they must compete more intensively and in a global market. Institutions must find increasingly innovative ways to deliver efficiencies. Going cashless can deliver both cost savings and an enhanced student experience.
Universities and colleges must face the reality that, although they exist primarily as places of learning, they also need to behave as businesses. Mobile contactless transactions topped £370 million in the first six months of 2017, with a 336% year on year rise in spending, according to the latest transaction data from payments processor Worldpay.
The use of mobile devices to make in-store payments has been growing steadily since the UK launch of Apple Pay in 2015, but it is only really in the past 12 months that the technology has begun to gain widespread acceptance beyond ‘early adopters,’ further fuelled by the launch of Android Pay in 2016 and Samsung Pay earlier this year.
Monthly spending on mobile devices has risen by 57% in the past six months (£46 million spent using mobiles in January 2017, compared to £74 million in June 2017), while mobile’s share overall in-store transactions has risen from 1.18% at the end of 2016 to 2.04% in June 2017.
Spending on all forms of contactless systems now accounts for 38% of all non-cash transactions in the UK. Total contactless spend in 2017 reached £9bn up to June, compared to £10bn throughout the whole of 2016.
If you're interested in learning more about how Epos Now can serve the HE sector, get in touch with Matt directly on 0330 1 003 610 or email firstname.lastname@example.org.